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Tuesday, December 23, 2014

I accepted a recent assignment for the Press & Sun-Bulletin – recounting how fracking was stopped in New York – with feelings of both eagerness and uneasiness.

Eagerness was due to having a chance to recap the history of a story I have been covering for seven years. The uneasiness stemmed from how I would do this in a newspaper-length article on a 48-hour deadline.

The results ran both in abbreviated and longer versions in the Press & Sun-Bulletin, Pressconnects, and this blog. The long version was 3,700 words -- about 10 times the length of a standard newspaper article. But it was still short considering the scope of the subject. By comparison, I needed more than 90,000 words to tell the story more comprehensively in my book, Under the Surface.

The key players that have shaped New York’ story from the onset number well into the hundreds, and I had space to reference perhaps a dozen in the newspaper piece. Not surprisingly, I have heard feedback from people that my story lacked some perspective. As one source put it, the story of the battle has become the battle for the story.

Two readers touched on particular events relating to a bill, signed by Gov. Paterson in 2008, that was the catalyst for events to follow. The bill would make spacing units for the large unconventional Marcellus gas wells conformable with existing state policy — a move that would effectively streamline the permitting process. Without it, shale gas development would get hung-up on an administrative process designed for the much smaller conventional wells.

The bill was the kind of wonkish-policy instrument that few lay people have the appetite for, and one that induces migraines to reporters writing for mainstream audiences. But it was also the sort of under-the-radar document that offers stakeholders who master it a strategic advantage in influencing important decisions. In this case, it was a necessary component for the gas industry to get things moving in New York. While this policy-making was different from the grass roots aspect of the movement that I report on, the bill ended up being a notable reference point and precursor to the anti-fracking movement.

Although the bill passed overwhelmingly, Assemblywoman Donna Lupardo and a small group of her colleagues voted against, she said, to “send a message to Paterson.” At the same time, she added, “local and statewide activists raised red flags about what this bill would do to speed up the process as well. That helped put the brakes on the whole matter.”

Paterson ordered a hold on permitting pending an environmental review when he signed the bill. But the bill had, for the record, a certain symbolic relevance. More importantly, it was a magnet for organizational involvement in state affairs that, by some accounts, was a forerunner of the anti-fracking movement.

Roger Downs, a program director with the Sierra Club, noted that several environmental organizations were among the first to recognize the significance of this spacing bill, and engage and challenge the DEC about what its impact would be.These groups included the Sierra Club Atlantic Chapter, Catskill Mountainkeeper, Riverkeeper, Delaware Riverkeeper Network, Natural Resources Defense Council, Catskill Center for Conservation and Development, The Wilderness Society and Catskill Citizens for Safe Energy, Damacus Citizens for Sustainability. (I’m sure I am leaving some out.)

Now, moving on to an altogether different thread of the story, Chip Northrup, the drilling-investor-turned-fractivist, offers another critical aspect of the story’s history: economics.

Northrup writes:

We can summarize why fracking was prohibited in New York with a simple construct – the cost/ benefit ratio – what the environmental risks and economic costs would be to the state and it citizens versus the benefits of shale gas industrialization. Initially, this ratio appeared to tilt very much in favor of fracking – at least in the popular press and in the corridors of power – because the gas industry had grossly overstated the benefits of shale gas development while categorically denying the risks and collateral damage associated with it.

I am currently finishing an updated version of Under the Surface, Fracking Fortunes and the Fate of the Marcellus Shale, to be published in paperback by for Cornell University Press next year. This will probably be close to 110,000 words. I would like to think, as the subtitle suggests, it covers a lot of ground and offers a pretty good idea of events that distinguish New York from Pennsylvania and the rest of the nation with the unfolding of the on-shore drilling boom. But there will always be more to report. In that spirit, I encourage readers to pass along any of their own stories or recollections.

Saturday, December 20, 2014

The following is an uncut version of an article I wrote the Press & Sun-Bulletin. The newspaper version, which ran on Dec. 21, 2014, was cut due to space constraints The full version is reprinted here with permisson of the paper.

One of many protests against fracking in Albany
Photo: James Pitarresi

In certain places in New York, Wednesday’s news of the state’s ban on fracking inspired public celebration.

When a manager at GreenStar Natural Foods Market in Ithaca announced the news over a loud speaker, people in the store began applauding, cheering, shouting and hugging. “People had worked for this for so long,” said Dawn Lodor, an assistant manager at the store, which helped organize opposition to shale gas development.

In pro-fracking camps, the news was met with bitterness and disbelief. Dan Fitzsimmons, head of the Joint Landowners Coalition of New York group, listened to the decision from Cuomo’s cabinet meeting in Albany streamed online to his farmhouse in Conklin. His reaction? “It was like a kick on the gut.” His phone started ringing after that with angry members of the coalition who, in Fitzsimmons words, “feel like they’ve been robbed.”

It was no surprise that the news was emotionally charged. But, for people on both sides of the issue, it was an abrupt endpoint of an epic policy fight that began nearly seven years ago.

New York’s shale gas story will be cast in history as one of false starts, near misses, empty promises, and a grass roots movement of the ages. From the beginning, some harbored great expectations for a shale gas boom in the Southern Tier. In the end it was a bust that never got off the ground.

I began learning the full implications of the shale gas story one day in early May, 2008, when several visitors came to the Binghamton Press & Sun-Bulletin newsroom. These sources included Fitzsimmons, long before he was president of the Joint Landowners Coalition of New York, and Tim Whitesell, Town of Binghamton Supervisor. At the time, few people knew what fracking was, and most associated “Marcellus” with a small town in Upstate New York.

Sitting with a group of editors in “the pit” a wall-less space in the corner of the news room with a sunken floor and a white board where editors jotted story ideas, our sources informed us that agents representing gas exploration companies – “landmen” – were seeking mineral rights to the land in the towns of Conklin and Binghamton. The landmen tended to approach people with the largest tracts first. These were often farmers or descendents of farmers, and many of them were duly skeptical, but excited. What was not to like about the notion of abundant energy that could be safely extracted from beneath the land with deals that could make people rich? That was what the landowners were told, at least, and that’s what they hoped for.

At that time, land leases for mineral rights were not unusual in parts of New York state, especially in places in western New York where operators, mostly small independent outfits, had drilled wells for generations. In places east of Owego, and the Finger Lakes region, these leases rarely lead to development and the leasing money was incidental – maybe $5 or $10 an acre. Now, we were told by Fitzsimmons, that landmen were offering hundreds of dollars per acre, with some reports of $1,000 or more. The Marcellus Shale – a rock formation long-known to hold an abundance of gas that was technologically inaccessible – was their target. (The Marcellus ran at an angle from Marcellus, New York, where it jutted above ground, all the way to West Virginia and parts of Ohio and Maryland, where it was more than a mile deep.)

Southern Tier residents were learning that the first successful wells in the Marcellus –featuring a combination of new techniques -- had spurned a burgeoning gas rush just across the border in Susquehanna County, Pennsylvania. Unlike the type of conventional drilling western New Yorkers were familiar with – clusters of vertical wells generally contained in a geographically limited area – this shale gas development involved drilling into rock that extended under entire states. Operations would encompass vast regions. It required unconventional technology. Well bores would be oriented horizontally along the vast mantel of Marcellus rock, and then the bores would be injected with pressurized solutions of unknown but effective chemicals to break the rock and free the gas. The scope, scale, and sums of money were seemingly unprecedented.

For the next six-plus years, the story would be told through several hundred articles in Gannett’s Upstate New York newspapers. It would play out one way in New York, and another way in Pennsylvania, with outcomes that reflect each state’s political attitudes and comfort levels with mineral extraction.

As the price of natural gas approached record highs in early 2008, the fervor over gas development spurred ever more aggressive efforts of landmen charged with securing acreage for drilling. They also fostered growing expectations among landowners seeking a deal of a lifetime. The bidding rose from hundreds of dollars per acre to thousands of dollars per acre, and in the newsroom, we heard complaints from landowners who had signed away their land rights without understanding the value of the mineral resources.

With this concern, early stories seized on the efforts of Chris Denton, an Elmira attorney, and members of the New York Farm Bureau, who became important advocates for landowners. They gave presentations to audiences packing school auditoriums and town halls in places where landmen were sent to secure acreage, which at the height of the leasing frenzy in 2008 included a large part of upstate New York.

Many Southern Tier owners saw the approach of the landmen as a Beverly-Hillbillies–moment. But at his presentations, Denton gave a sobering message: Beware of the industry lease. It’s “a complex-business transaction masquerading as a lottery ticket.” A standard lease was worded in a way that gave operators rights to minerals under their land, of course, but it also gave them rights to do whatever they needed above land to get at riches below.

The state’s permitting guidelines –designed for conventional drilling -- were outdated and insufficient to handle shale gas development. This made matters worse. Landowners had to take matters into their own hands by crafting land-use agreements to ensure environmental safeguards. Denton was the first of several attorneys who would begin advising landowners groups on leasing strategies.

MEGA DEAL

The story went from big to bigger on May 11, 2008 with news from Sanford, a town of 2,400 people on the eastern edge of Broome County. Dewey Decker, town Supervisor, headed a group of 300 farmers – controlling some 50,000 acres – who banded together to leverage bargaining power against companies. None of the landowners would sign a lease without a deal that was acceptable to all. With this technique, the Deposit group landed a deal with XTO Energy for $90 million. That figure would soon grow to $110 million with subsequent sign-ons.

The terms included $2,411 per acre for leasing rights for five years and the same amount for the three-year extension. In addition, if prospectors hit gas, the landowners would get 15 percent of the royalties. Without a single well drilled, many of the farmers, including Decker, made more in a single day than they would their entire lives. Mega deals were also being signed in Pennsylvania, and the media coined a new word for farmers like Decker: Shallionaires.

While the job prospects for rig workers in Pennsylvania remained mostly filled by itinerate crews from Texas and West Virginia, there was a surge of new business for lawyers and accountants. My reporting of the Deposit deal stated it this way: “Now, people who had problems paying property taxes suddenly will have ... more tax problems. Income taxes could immediately bite into a third or more of leasing revenues. ‘It's quite a change, and I hope people can handle it,’ Decker said. ‘The lawyers and accountants are going to make out quite well.’ ”

GREAT EXPECATIONS

News of the XTO deal fueled a gold rush mentality in the Southern Tier.

People began reasoning that, if XTO found resources under the land in the Town of Sanford with that kind of value, then other gas companies prospecting in nearby towns along the Pennsylvania Boarder also harbored riches. Lease offers reported in Broome County towns bordering Pennsylvania soared. In some areas along the Millennium Pipeline, where the market produced a premium for ready access to infrastructure, offers rose to $5,000 an acre or more.

XTO was a $13 billion company that would later be bought out by Exxon Mobil, and a far cry from the smaller independent operators that had done business in New York. People were rightly filled with a sense that they were heading into unfamiliar territory with the Marcellus prospects, and they began crowding town halls and school auditoriums in their quest for information.

Many of the meetings were sponsored by town officials seeking answers from officials from the state Department of Environmental Conservation about how the impacts from shale gas development would be managed in New York. One such meeting, on July 16, 2008 in the municipal building of the town of Chenango, was crowded with farmers, suburbanites and officials from town, county and state governments. They were not necessarily against fracking, but they had plenty of questions. What about public safety concerns, roads, and waste disposal?

Linda Collart, regional supervisor with the Division of Mineral Resources, assured the crowd that there would be little or no impact; the agency had been managing gas development for generations. In her power point presentation, she showed a picture of what shale gas development would look like: A small valve poking from the ground with a lush meadow of wildflowers and grasses in the foreground an a bank of trees in the background. This was a reclaimed natural gas site, she said, and an example of the expected long-term impact from Marcellus development.

In what would become a defining moment in the local history of the shale play, a person from the back of the room stood up and asked her how local emergency responders could prepare for a spill, fire, or explosion when the industry did not fully disclose the complete chemical content and concentrations of fracking fluids.

Another person stood up and asked how regulators were preparing for an influx of drilling that would exceed any historical comparison.

Collart responded, “We have been doing fine so far … No problems!”

Collart stood by that line at several meetings, and the more she gave it, the more agitated and skeptical towns folks became.

A meeting in Greene was scheduled the day after I reported Collart’s responses at the Town of Chenango meeting. For this, Governor David Paterson’s office, responding to growing skepticism about the DEC’s ability to manage shale gas, sent Judith Enck, the governor’s top environmental advisor and Stuart Gruskin, executive deputy DEC commissioner. As with earlier meetings, the questions reflected frustration from the crowd of more than 500 people who felt they were not getting straight answers, but Enck’s response was different than Collart’s.

“The DEC is going back and doing its homework,” she said. “I’m sure you will hold our feet to the fire and make sure it gets done.”

Later, Gruskin told me that the Greene meeting was a “fork in the road.” He explained: “If there was ever any doubt about the significance of all this, going to that meeting made it clear that it was going to be a really big issue in New York,” he said. “We had to make a decision as to how we were going to approach it.”

Within days of the Greene meeting, the state legislature approved a bill, pushed by gas companies and submitted by the DEC, that would make spacing units for the large Marcellus gas wells more uniform – a move that would effectively streamline the permitting process. Without it, shale gas development would get hung-up on an administrative process designed for the much smaller conventional wells. Paterson signed the industry-supported bill. But, with input from Enck and Gruskin, he also declared that permitting could not begin until the agency under took a comprehensive review of its impacts. The document, know as the Supplemental Generic Environmental Impact Statement (or SGEIS) was born.

At the time, even gas supporters didn’t seem to mind the time out, which they saw as a necessary step to make things move smoothly. “It’s a process in which we will be learning as we move forward,” said state Senator Tom Libous, sponsor of the spacing bill. “We have to make sure the environment is protected. I am pleased so far.” At the time, people expected the review to take a year or less, and shale gas would begin soon in New York.

Before the SGEIS could be finalized, it had to go through a public review process. This standard procedure for public policy would make the document a critical instrument for the anti-fracking movement to delay shale gas until people finally got the answers to the questions raised at public meetings. The more they found out, the more questions they had.

A MOVEMENT BEGINS

The second turning point of the story came with a bang, literally, on New Years Day, 2009 in Dimock, Pennsylvana. An explosion rocked the frozen ground in Norma Fiorentino’s front yard and concrete dust billowed over a gaping hole where her water well was housed. The blast destroyed the well that supplied her trailer on her 7-acre homestead. Though there were no casualties, the incident raised many questions and, eventually, led to state and federal investigations about the safety and viability of shale gas development in Susquehanna County. In months and years that followed, the Pennsylvania state Department of Environmental Protection found that methane was seeping from nearby gas wells drilled by Cabot Oil and Gas into water wells in the area where Norma lived. Cabot responded that methane comes from the ground and factors other than drilling can bring it into contact with water supplies. Cabot denied that its operations caused the problem, and at one point accused the DEP of fabricating the story.

The events in Dimock highlighted a battle over whether fracking was a good thing or a bad thing. At the heart of it was the issue of trust, and who could be believed – industry, government, or neither. The industry, at the time, was standing by a claim that fracking had not contaminated a single water well throughout its history. This motivated journalists, critics, and activists who sensed a bending of the facts and possibly a cover up.

After Norma’s well exploded, Walter Hang, head of an environmental research firm in Ithaca, began searching data bases from the DEC to see if he could find records ot similar incidents in New York State. He uncovered 270 files documenting wastewater spills, well contamination, explosions, methane migration and ecological damage related to gas production in the state since 1979. Those findings were the subject of an article in this paper on Nov. 8, 2009. Continuing his research in 2010, Hang uncovered documents that showed William T. Boria, a water resources specialist at the Chautauqua County Health Department, reported his agency had received more than 140 complaints related to water pollution or gas migration associated with nearby drilling operations. In a 2004 memo summarizing the issue, Boria stated: "Those complaints that were recorded are probably just a fraction of the actual problems that occurred." County health officials tabulated information on 53 of the cases from 1983 to 2008 on a spreadsheet, including one where a home was evacuated after the water well exploded.

The first draft of the SGEIS had been released on September 30, 2009, and by then the anti-fracking movement was becoming a powerful grass-roots phenomenon. The first public hearing on the state’s policy proposal to permit shale gas was held six weeks later at the Chenango Valley High School. It had more the feel of a pep rally than a public hearing.

Lines began forming outside an hour before the doors opened at 5:30 p.m. Some people wore costumes—one was a barrel of toxic waste; another, a gas company executive billionaire with money coming out of his hat. They held signs that read “Don’t Frack on Me” and “You Can’t Drink Gas or Money.”

Drilling supporters were also represented, most visibly by people who wore t-shirts that read “Pass Gas, It’s a Movement.”

Environmental conservation officers wearing ranger’s hats and bearing sidearms stood attentively at various entrances and milled about the lobby as more than 1,000 people filled the auditorium to capacity.

For the next three hours, speakers lined up for a turn at the microphone, where they offered impassioned praise or criticism of the drilling industry and its plans to set up shop in Broome County. The meeting in Broome County was one of four throughout the state, and each drew a large and impassioned response.

In the three-month period allotted for written responses, the agency received more than 14,000 formal comments, and it had to address them all before the plan
could become final. The anti-fracking movement won its first and major victory in stalling a decision on shale gas.

CLOSE CALLS

In the years that followed, those who favored shale gas pressed on in the face of even more delays. With the economy languishing for years following the stock market crash of 2008, landowners kindled hopes of making money with gas leases. In northern Pennsylvania and the Southern Tier of New York, tens of thousands of landowners began organizing into dozens of groups to lease their land. Many were organized through Denton and the Farm Bureau, and Binghamton lawyer Scott Kurkoski.

Continued delays and falling natural gas prices did little to deflate expectations. A study commissioned by the Broome County government in late 2009 found full-scale Marcellus production could involve up to 4,000 wells, generate $14 billion in local spending, and support between 810 and 1,600 new jobs for a decade.

Although the report lacked an assessment of the social and environmental cost, Broome County government budged $5 million in revenues from the gas rush, before it had even signed a lease. Nathaalie Maxwell, budgeted director at the time cited “conservative” expectations for “a multi-billion industry that has set its sights on Broome County.”

At the time, there was still convincing evidence that major companies were interested in extracting gas from under Broome County. In June, 2009, a coalition headed by Dan Fitzsimmons and represented by Scott Kurkoski, announced a deal with Hess that would generate $66.5 million in lease payments and 20 percent royalties for 19,000 acres of land owned by about 700 people. The deal failed to close, however, due to differences in how the lease would be structured to control land use. Hess eventually signed a deal with residents in Northern Pennsylvania instead.

FATAL BLOWS

After the Hess deal, political, economic, and social factors continued to erode the chances of shale gas development in New York.

The anti-fracking movement would become galvanized in the summer of 2010, with the premier of Josh Fox’s movie, Gasland, on HBO. Gasland, which was screened in Binghamton and Ithaca, featured a shot of Mike Markham, a resident living near shale gas development in Weld County Colorado, lighting his tap water on fire. The movie, which also featured Norma Fiorentino’s well and other scenes from Dimock, Pennsylvania, became a rallying point for the anti-fracking movement in New York.

The SGEIS was sent back to the drawing board, and when the Cuomo administration issued a revision on September 2010, it was again flooded with comments from well-organized and informed critics that led to another backlog.

In years that followed, New York’s anti-fracking movement blossomed into a celebrity cause, supported by performances, rallies, appearances and speeches by Natalie Merchant, Pete Segeer, Mark Ruffalo, Bobby Kennedy Jr., Yoko Ono, Sean Lennon, Josh Fox and others. A group of professionals added credibility to star power. Sandra Steingraber, a noted author, scholar, and ecologist, became a leading figure and motivational speaker. Tony Ingraffea, an engineering professor with vast industry experience, was also a leading influence in the movement and an organizer of Physicians Scientists & Engineers for Healthy Energy.

The fracking debate in New York would extend to both local and federal governments. In 2010, the federal Environmental Protection Agency was directed by Congress to use a portion of its allotted funding for a peer-reviewed study of the relationship between hydraulic fracturing and ground water. The effort -- championed by (now retired) Rep. Maurice Hinchey, at the time chair of the Appropriations Committee -- included a hearing at the Broome County Forum on September 13, 2010. That event drew about 1,500 people from throughout the region. Notably, the EPA hearing was headed by Judith Enck, who had left her job with the DEC to accept appointment as regional director of the EPA. The results of the study are yet to be released.

Yet the biggest defeat for the shale gas industry in New York, prior to Wednesday’s announcement by the Cuomo administration, did not come until late May of this year. That’s when the state’s high court upheld a decision that allowed local governments to control where and if fracking occurred. The concept, know as home rule, was a result of the court’s ruling to uphold fracking bans in the towns of Dryden and Middlefield. Prior to the decision, the state controlled where gas wells went. The Court of Appeals made clear that zoning and land-use restrictions apply, and towns could not proceed without recognizing fracking as an accepted use.

The decision by the Cuomo administration to ban fracking statewide Wednesday caught everybody by surprise. Hours before it was announced, I was scheduled to cover a town board meeting in Windsor, where officials intended to discuss changes to land use plans to allow fracking. Windsor was one of many towns along the Pennsylvania border going through that process – which was deemed necessary before the state could issue permits. Now, much to the dismay of people like Dan Fitzsimmons, the issue of local control is moot.

Antifracking activists, who were geared up to fight a decision from the governor’s office that would permit fracking, also have to make some adjustments. Dawn Lodor, the manager at GreenStar said the store had commissioned a bus to take fractivists to a rally in Albany in January to protest fracking. They are still going, but now they plan to make it a public celebration.

Wednesday, December 17, 2014

Tonight, I was scheduled to cover a town board meeting in Windsor, New York, where officials were going to review a plan to change their zoning to allow fracking. The process for a zoning change promised to be long and contentious, and was necessary in light of a recent court ruling putting the decision of whether and where to drill in the hands of local governments.

Things changed dramatically this afternoon, when Governor Andrew Cuomo announced that he would ban shale gas development statewide due to unacceptable health risks. Cuomo’s position, backed by a long-awaited report from the state Department of Health, is a departure from his earlier position that he would allow fracking where local governments favored it. Reporters, pundits and the public they serve are still getting their minds around Cuomo’s emphatic decision, which came after more than six years of policy review. While it puts the matter to rest, many questions remain: What are the legal consequences? Do industry lawyers and supporters, who have been beaten at every turn in their efforts to bring shale gas to New York, have another challenge in them? Or is this the end of the line?

Those answers will come soon, but apparently, from my conversations with sources and a press-release from the Joint Landowners Association of New York, not tonight. The news of the hour is that, after a six and a half-year journey, fracking is dead on arrival in New York. Along that line, I share my response to a request by Andrew Revkin, author of New York Times Dot Earth, for a "what just happened" analysis. (Revkin’s compilation of reaction from many informed sources can be found here.)

Cuomo’s decision is consistent with his progressive politics that got him to where he is now. It's a bold move and I optimistically take it as sincere attempt to overcome the inertial forces of fossil fuel dependency. Success here could add considerably to his legacy. But he has much more to do. The fracking ban needs to be accompanied by practical reforms and initiatives in energy development & consumption. How much longer will New York City residents have to rely on Fuel Oil as their primary source of heat? What about coal burning plants? I have written about the answer to these questions by a group of scientists and professionals that have contributed to the credibility of the anti-fracking movement. I offer that post again here.)

So why did it take six and a half years? Science takes time. Establishing risks of high volume hydraulic fracturing and the new era of on shore drilling it has enabled is especially difficult because shale gas development is relatively new. The industry controls most of the information and has plenty of legal, scientific and political wherewithal to challenge any conclusions that don’t work in its favor.

Science is part of the calculus. But despite what Cuomo would like us to believe, scientists don’t make these kinds of decisions. The full equation is Science + politics = policy. Cuomo finally got tired of being hounded on the issue by his political base. The movement in New York against shale gas was relentless and it was focused on him. At one point, he told Susan Arbetter, host of Capitol Press Room, that it was the most effective political action campaign he had seen. (I will link to that interview as soon as I find it, but I wanted to get this post up right away.) Activists, both institutional and grass roots, promised to step up their efforts if Cuomo allowed even a single well.

The Home Rule decision by the state’s high court in June, and the depressed price of natural gas made a decision politically easier. Cuomo would have a hard time taking the perceived riches of fracking from landowners back when landmen were at their doors with big checks in hand. Nobody is currently seriously looking at shale gas exploration, much less development, in New York with gas prices as low as they are and the encumbrances of Home Rule.

New York has become a showcase for the anti-fracking movement, and Cuomo's decision today has raised the movement's stature nationally. But it’s also important to remember that Cuomo’s decision is the end-point of a process that started 6-plus years ago - before frack was a bad word. As recounted in my book, Under the Surface, the moratorium issued by Governor Patterson in July, 2008 had nothing to do with organized fractivists, who did not appear on the scene until after Josh Fox’s movie Gasland two years later. New York’s moratorium was the direct results of landowners posing reasonable questions in public hearings about how the state was prepared to govern shale gas development. Six and half years later, Cuomo’s actions have provided the answer: it wasn't then, and it isn't now.

Tuesday, July 22, 2014

Pennsylvania’s regulation of the shale gas boom has been underfunded, inconsistent and ineffective, according to an investigation by the state’s auditor general released today.

Auditor General Eugene DePasquale likened the Pennsylvania Department of Environmental Protection’s efforts to oversee the industry to “firefighters trying to put out a five-alarm fire with a 20-foot garden hose.” He added: “There is no question that DEP needs help and soon to protect clean water.”

The audit, covering a period of 2009 through 2012, was launched by DePasquale immediately after he was sworn in as auditor general in January 2013. It came in the wake of a controversy over whether state investigators obscure or alter the outcome of investigations into drilling’s impact on water supplies by disclosing an incomplete suite of chemical tests. The intention of the probe, according to a letter from DePasquale at the time, is to determine the "adequacy and effectiveness of DEP's monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination."

The report was blunt in its findings: the problems related to shale gas development are much deeper and broader than the DEP can presently handle, and they often go unaddressed or left up to industry without adequate follow-up by the agency. The problem is rooted to a wholesale lack of inspections, enforcement and transparency.

Often, according to the report, the agency does nothing about confirmed cases of water pollution tied to drilling problems. After reviewing a selection of 15 files of water degradation tied to nearby shale gas operations, auditors found the agency issued only one order for the driller to restore or replace the water supply. Instead, the DEP relied on voluntary action by companies to resolve complaints and violations.

“When DEP does not take a formal, documented action against a well operator who has contaminated a water supply, the agency loses credibility as a regulator and is not fully accountable to the public,” DePasquale said. “When DEP has enforcement authority under the law it must exercise that authority routinely, consistently, and transparently. Those gas well operators whose actions cause harm to water supplies should not get an enforcement ‘pass’ just because they have convinced DEP that they will come into compliance with the law or that they negotiated a settlement with the property owner.”

Among other findings:

• The DEP does not post required inspection information on its website. Auditors found errors of more than 25 percent in key data fields, and 76 percent of inspectors’ comments were omitted from the online inspection reporting. “It is unfathomable to us that for a basic responsibility of DEP -- inspecting oil and gas facilities – little criteria exists for when those inspections should occur,” DePasquale said. “Until DEP updates its out-of-date inspection policies, to include mandated inspections at specific critical drilling stages and during the life of the well, it will be nearly impossible to measure DEP’s performance in conducting this very basic responsibility to protect the environment.”

• The DEP does not use an official and independent system to track shale gas well waste from the well site to disposal. Instead, the agency relies upon a “disjointed process that includes self-reporting by well operators with no assurances that waste is disposed of properly.”

• With respect to transparency, auditors discovered that accessing DEP data is “a myriad of confusing web links and jargon” that was often incomplete. “We could not determine whether all complaints received by DEP actually were entered into the system. What’s more … it is difficult to figure out exactly how many complaints were received, investigated, and resolved by DEP,” DePasquale said.

Although reports critical of the gas industry and regulators are nothing new, the inspector general’s report is noteworthy because it comes from within an independent arm of state government.

The DEP disagreed with all of eight findings of the audit critical of the agency, but agreed with a majority of the 29 recommendations for improvement.

Auditors encouraged DEP to:

• Issue orders to a well operators who pollute water supplies —even if DEP used the cooperative approach in bringing the operator into compliance or if the operator and the complainant have reached a private agreement;

•· Develop better controls for how complaints are received, tracked, investigated, and resolved;

• Hire additional inspectors to meet the demands placed upon the agency;

Friday, July 11, 2014

Late last month, New York’s high court issued a ruling that put the debate over the merits and risks of shale gas development in the hands of local governments. The much-anticipated ruling – a monumental victory for grassroots political action -- settled a long-standing question regarding the state’s jurisdictional control over the matter. Yet it raised many other questions about how local governments will respond.

There are towns for drilling and towns against drilling. But much of the fight over where and to what extent shale gas development – including high volume hydraulic fracturing -- will be a part of the New York landscape will play out in towns with no stated policy. Do communities that don’t want fracking need to actively pass a ban? Can communities that want fracking amend zoning laws to encourage it? What happens if they do neither?

These questions are predicated on a pending decision by Governor Andrew Cuomo on whether to allow fracking anywhere in the state. While the outcome of that remains anybody’s guess, we know from Cuomo’s past remarks that he favors a plan to begin issuing shale gas permits in towns with no local bans. These happen to be along the border with Pennsylvania, which also sit over the most viable parts of the Marcellus Shale. This dynamic becomes especially relevant to towns in this area – and there are many of them -- with no comprehensive plan and nothing on the books specific to fracking.

One of these places is Vestal, where dozens of residents against fracking attended a town board meeting this week to urge elected officials to pass a local ban.

The reaction by Town Supervisor John Schaffer, as reported by BinghamtonHomepage.com, was not especially concrete. "Our town code says you can't do it here to begin with, and I've told these people [anti-fracking activists] that over and over and over," Schaffer said. He then added: "We’re aware of the recent Court of Appeals decision regarding home rule. While the decision permits the town to enact legislation that would ban fracking, it does not require us to ban it. According to the town board, we will carefully monitor this issue and will act when and if there’s an incident for us to do so."

(In her blog The Marcellus Effect, Sue Heavenrich covers a similar controversty unfolding in Candor, NY.)

Some legal experts say that towns could – depending on wording and interpretation of local law -- grant variances to gas companies to site wells in areas otherwise zoned against industrial use, which is just what supporters of gas development are hoping for and what opponents dread. Attorney Helen Slottje represented Dryden and Middlefield in their Home Rule victory. In a recent appearance on Capitol Press Room, Slottje pointed out that while the Court of Appeals ruling would make it more difficult for operators to drill in zoned areas, it would still be possible, depending on how a given town reacted to the ruling.

“There are in most zoning codes various exceptions for different uses that could be construed by a court to be like gas drilling sufficient to allow gas drilling to proceed,” she said. “The safest thing for a town to do is to pass a zoning amendment or stand alone law that makes it clear that gas drilling is not permitted in their town.”

Industry lawyer Tom West also raised that possibility. He told host Susan Arbetter his clients would be “implementing a strategy to protect our investments,” but because the nature of the fight had been so tactical – like a chess game where each side was anticipating the other’s moves -- he was “not at liberty to discuss that strategy.”

All this sounds suggestive and inconclusive because it is, at least until the matter is fully deliberated and acted upon at a town board level.

Some activists are already beginning to push the matter. Sue Rapp, a member of Vestal Residents for Safe Energy (VeRSE), characterized Vestal Supervisor Schaffer’s comment that the town would take a wait-and-see approach as “garbled messages not on point ... When examined, his remarks convey nothing of substance on the issue of zoning regs/variances and gas drilling.”

The ambiguity can be maddening or inviting, depending on your stake in the debate, and it has provoked some thoughtful comments from readers on my recent post about fallout from the Court of Appeals decision.

In response to a comment by Mary Sweeney, who pondered whether existing zoning laws would preclude drilling with no stated bans, fracking critic and policy analyst Stan Scobie elaborated on the undisclosed plan that West mentioned on Arbetter’s show. According to Scobie, West is organizing a campaign with certain towns over Marcellus shale zones to create policy – zoning overlays – that would maximize development of the play by creating the legal architecture to override zoning laws. Scobie writes:

Governor Cuomo and the DEC some time ago raised a difficult issue, namely, fracking would perhaps be OK in those towns who "wish" to be fracked, but how would we know which ones they are? To address this the pro-drillers have crafted a "zoning overlay" strategy.

This plan would have each town modify their Comprehensive Plan, if they have one, to be somewhat fracking friendly, and then develop and legislate zoning overlays. These would, if passed, clearly identify the towns and areas in towns where fracking was OK. There would be no "frack me" resolutions passed quietly and quickly at Town Board meetings with zero attendance as seemed to be the case a couple of years ago.

Scobie’s full response can be viewed here in the comments section.

This week, I asked West in an email whether zoning laws already on the books – those that prohibit industrial operations in residential or other areas -- effectively serve as “bans” to oil and gas. And of if so, can drilling supporters work around them? West responded:

Whether oil and gas activities are considered an industrial use, will be a municipality by municipality determination... Much of the clarification will come over time.

In other words, much of where drilling is allowed will come down to interpretation of local zoning laws, and that interpretation will be made on a town by town basis by local leaders and their lawyers.

In short, the fight over drilling in New York is far from over. It continues on the state level, where activists like Walter Hang are leading a campaign to pressure Cuomo to withdraw the controversial policy review that is essential for it to go forward. And, pending that outcome, it continues on a local level, where towns will have to either craft policy clarifying how and if their zoning laws apply to gas drilling, or face the prospect of court challenges and the consequences when push comes to shove with money, leases, and passions on the line.

Monday, June 30, 2014

It’s settled. There will be no fracking in New York communities such as Dryden and Middlefield – serene and scenic places that have passed rules that find shale gas development incompatible with local land use ordinances.

The three-year battle over jurisdictional control over the industry ended today when the New York Court of Appeals upheld lower court decisions that cedes control over where and if shale gas development can happen from state to local governments. That’s a landmark victory for Home Rule advocates, including residents of more than 170 upstate communities that have passed moratoriums or bans on the controversial process.

But the future of fracking in the Empire state remains more unsettled than ever. All of the communities with fracking bans happen to be outside areas with the strongest prospects for shale gas development. In Southern Tier counties bordering the booming gas fields in northern Pennsylvania, many local governments either support fracking, or have no enforceable policy to prevent it. For every place like Dryden, there is a place like Sanford, a rural community near the Pennsylvania border that sits over 50,0000 acres of the Marcellus Shale, for which XTO Energy – a subsidiary of Exxon Mobile – has paid farmers $110 million just for the chance to test.

Sanford has no land use restriction, and is governed by a town council eager to see rigs and roughnecks role across the Pennsylvania border and clear pads in the meadows, fields and woodlots of Southern Tier farms. And according to some who have been engaged in the fight since it began with the leasing rush of 2008, the prospect of drilling in these places is more imminent following today’s court ruling.

The court decision in effect provides legal sanction to a plan proposed by Governor Andrew Cuomo in the summer of 2012 to begin issuing permits on a trial basis in areas where communities and industry favor development. As reported by Danny Hakim of the New York Times in June, 2012: “Cuomo’s administration is now trying to acknowledge the economic needs of the rural upstate area, while also honoring the opposition expressed in some communities, and limiting the ire of environmentalists, who worry that hydrofracking could contaminate groundwater and lead to other hazards.”

Walter Hang, a policy analyst who runs Toxic Targeting, an environmental data firm in Ithaca, said Cuomo’s plan from 2012, combined with today’s court ruling, moves New York state a step closer to fracking in these places. “Today’s decision serves up the Southern Tier on a silver platter to allow shale gas development to begin,” he said. “Sure, it prevents fracking in some areas. But it allows it in the five counties along the Southern Tier where it’s most likely to begin. It’s the classic double-edged sword.”

Cuomo’s plan in 2012 to begin fracking in certain localities but not others drew support for those pinning the promise of economic development on the drilling industry, and drew rallies and protests by anti-frackers, who characterized the fracking trials as “sacrifice zones.” Cuomo has been mostly silent on the issue since then.

Not everybody shares Hang’s outlook. Some anti-fracking activists expect that New York’s ruling will not only discourage shale gas development in New York but will also encourage other municipalities throughout the country to establish land use restrictions. (See comments of Mary Ann Sumner, the Dryden Supervisor who helped organize the ban.) And Brad Gill, executive director of the Independent Oil and Gas Association of New York, called the court decision “one more nail in the coffin” for fracking in the state. Gill’s view, often echoed by other industry supporters, is that drill operators will be less likely to commit capital to area that lacks regulatory uniformity and predictability. There is truth to both of those views, but they overlook the fact that the industry, first and foremost, will follow the geology. Wildcaters, in particular, are likely to seek out niches in unexplored territories, like the Southern Tier of New York.

As with most policy calculations, science and law are fundamental factors, but politics will be the decider. The Legislature could pass a bill clarifying ambiguous language over the state’s role in extraction operations on which the Home Rule case was built. It’s also possible that the Legislature could ban fracking altogether, although anti-fracking bills passed repeatedly in the Assembly over the years are yet to fly in the Senate.

For now the decision remains firmly in the hands of the governor, who can at anytime enact or withdraw the policy review of fracking, called the Supplemental Generic Environmental Impact Statement. The 1,000-plus page document is as complicated and bureaucratic as its name suggests, and it's been on hold for years. Don’t expect that to happen before election. Rocking the boat on this hypersensitive issue would certainly alienate the governor’s progressive base. But after election-day, he has plenty of politic wiggle room and, with today’s Court of Appeals ruling, a clearer view of the legal landscape.

Thursday, May 22, 2014

New York’s Marcellus Shale gas reserves, once thought to be world class, continue to lose their luster along with the gumption to develop them.

Shale gas proponents, once giddy with anticipation during the leasing boom of 2008, know now what they didn’t know then: legal hurdles to overcome state and local roadblocks look more formidable if not insurmountable with each passing court case and hearing, and the resource looks less and less worth the effort under today’s economics.

Given the inherent uncertainty in mineral exploration, much of the impetus behind it boils down to a mindset. While even some of the most ambitious extraction endeavors go bust, it’s a given that resources buried 5,000 feet deep will not be found where nobody chooses to look. And nobody is going to look if they are not allowed to, or if the effort of looking is deemed greater than the rewards anticipated under any scenario.

Two recent indicators of future prospects in New York have, for the most part, slipped under the radar of the mainstream press, but it’s a reasonable bet they have not escaped notice of prospectors and the people who finance them. The first indicator is the status of a lawsuit by industry and a group of landowners to legally force open the Marcellus frontier in New York. I’ll get to that in a minute. The other indicator is the latest assessment of economically recoverable reserves under current market conditions, if the moratorium were lifted or bypassed.

First the economics. Although it may be a fading memory for many, stakeholders will remember a time when New York was expected to join Pennsylvania as a global energy producer with gas from the Marcellus Shale. Many will recall the summer of 2008, when the leasing frenzy – whipped up by a $110 million deal between XTO Energy and landowners in Deposit, New York – sent lease prices soaring along the relatively unexplored fringes of the Marcellus in the Southern Tier of New York.

Since then, the price of natural gas has fallen by more than two thirds. Moreover, New York state’s moratorium on shale gas development, pending a review originally expected to last a year, is about to begin year seven, with no end in sight. In the meantime prospectors have moved on to other ventures, leaving many to wonder when and if they will return to the Empire State. The answer is simple: They will return when and if a) it’s allowed and b) it’s profitable.

The League of Women voters became interested in the profitability issue when the state released its 2014 Energy Plan, which includes vague references to shale gas development within New York’s borders. To help bring things into focus, the league commissioned petroleum geologist Arthur Berman and petroleum engineer Lyndon Pittinger to assess the potential of the shale gas under New York state in the context of market viability.

The result, a report titled Resource Assessment of Potentially Producible Natural Gas Volumes from the Marcellus Shale, State of New York, was released last month. It begins with varying projections of the Marcellus Shale potential from credible sources that show, if anything, just how uncertain the starting point of that calculation is and always has been. Estimates of the recoverable reserve range from those posed by Penn State geologist Terry Engelder in 2008 -- 489 trillion cubic feet (tcf), with about 71 tcf under New York stat – to those offered by The United States Geological Society in 2011: 84.2 tcf for the entire Marcellus play extending through Pennsylvania and four other states.

To clear up a point of common confusion, these numbers represent “technically recoverable” gas. As Berman and Pittinger point out, the “economically recoverable” figure, which is more relevant, is bound to be lower. Both figures are moving targets. That which is technically recoverable changes with technological advances; economically recoverable resources change with economy, and specifically with the value of the resource. The value, in turn, is influenced by supply, demand, and infrastructure to get it to market. All of these things are influenced by regulation, which in New York remains unknown.

In a nut, the League of Women Voters report found that the business of fracking in New York, moratorium aside, would not be viable at today’s price -- between $4 and $4.50 per MMBtu, or Million British Thermal Units. The price would have to rise to $6 per MMBtu to encourage exploration and even then production would be modest -- between the 0.8 and 2.5 Tfc. A price of $8 MMBtu would encourage production between 2 to 9.1 tcf -- more than marginal but hardly the bonanza that people were expecting in 2008. For gas to reach $6 MMBtu, Berman notes, “Substantial unforeseen changes in the natural gas supply/demand balance would need to occur.”

It’s fair to note that Berman has long been a critic of shale gas development, and his projections tend to reflect a broader notion that its economic sustainability falls well short of expectations promoted within the field. But he is respected, and even shale gas proponents such as Engelder, given the chance, show no eagerness to flatly dismiss his assessment of New York. “Art may not be that far off the mark although he is usually low relative to other analyses,” Engelder said in a recent email, asking his take on Berman’s work. “Maybe some of Broome County works at $4 gas,” Engelder added.

It’s also worth noting that Berman’s analysis draws on and expands the same school of thought developed last year by a team comprised of a cross-section of professionals, led by investor Chip Northrup, who happen to be upstate New York residents and who have been conspicuous in the battle to keep fracking out of their state. The team also includes Lou Allstadt, a retired Mobil vice president, Brian Brock, a geologist, and Jerry Acton, a retired systems engineer for Lockheed Martin. (Here's link to Northrup's blog, No Fracking Way.)

Within days of the release of the report by the League of Women Voters, shale gas proponents suffered another discouragement on the legal front. First, some background: Undaunted by a string of defeats in state court that have consistently ruled in favor of municipalities’ rights to ban drilling, a legal team representing landowners and industry filed a suit against New York that claims the indefinite moratorium on shale gas development violates the state’s own policy under the State Environmental Quality Review Act. The state filed a motion for dismissal on the grounds that the plaintiffs had suffered no damages and the moratorium fell well within the state’s right in establishing policy on shale gas, regardless of how long it took to review all the factors.

The complaint was filed by the Joint Landowners Coalition of New York, represented by Scott Kurkowski and funded by the Mountain States Legal Foundation, a group founded by the Koch brothers to fund conservative legal causes. A companion suit was filed by industry lawyer Tom West on behalf of Mark Wallach, a trustee of Norse Energy, a bankrupt drilling company with interests in upstate New York. Morgan Costello of the attorney general’s office provided council for the state.

On April 24, both sides appeared in a hearing before state Supreme Court Judge Roger McDonough. It’s often tough to tell the outcome of a case based on a hearing and prior to a ruling, but by all counts, the judge seemed to lack sympathy for the landowners, and pressed them on the merits of their complaint against the state. Here’s an excerpt from an account posted April 26 on the Joint Landowners website:

Judge McDonough asked if the executive branch can delay forever. Ms. Costello’s answer was that it can take extended time. Judge McDonough seemed to agree with Ms. Costello on the executives role, calling it “separation of powers 101.”

Attorney Tom West for Norse spoke next. The Judge focused on time limits in SEQRA. There are none. He suggested that this should be remedied in the legislature or in the executive branch. As Attorney West kept hammering at the history of delay and the ongoing wrong, the Judge said that he can only take the executive on its word at this stage of the process. (Editor’s note: Motive will emerge in discovery, but we have to get past the motion to dismiss in order to get to discovery.) The Judge sympathized with the frustration but kept returning to time limits in the law.

The blog concluded optimistically that the “judge reserved decision” and though he did not recognize the fracking moratorium as an “illegal delay” under the state’s SEQR policy, there may be an opening for an argument of “unreasonable delay.”

That optimism was not shared by West. In a recent email in response to my query about the status of the case, West was blunt: “We are not expecting a positive decision based upon the way that oral argument went.” The West Law firm took down the links to the complaints once posted on its website.

While the jury is still out, so to speak, there is little good news based on these recent events for those counting on a near-term future in shale exploration and development in New York, and plenty of good news for those hoping to see New York lay the groundwork to establish itself as an alternative energy trend-setter.

But the story is not that simple, of course, with plot lines extending well beyond New York, and woven deeply into the national and global circumstances that will determine the future of fracking. Those plots are quickly evolving.

One example: The U.S. Energy Information Administration has just cut its estimates of recoverable reserves in the Monterey Shale in California by 96 percent. California, like New York, is politically influential, and it’s hard to ignore other similarities regarding their roles in the fracking saga. In California, the notion that the geology cannot support the hype has enlivened the argument that the fracking bonanza was a bust from start, and has encouraged legislation for a moratorium similar to New York’s.

But while shale gas prospects are dimming in New York and California, they are getting a big push from places inbetween as well as other parts of the world. Global forces are encouraging development of gas reserves in dozens of other U.S. states to capitalize on growing international demand for cheap and readily available fuel sources, with the economic and political equation favoring expediency over externalized costs. Those demands, already substantial and growing in Asia, have spiked in Europe. The age-old call for energy independence is again taking on a new urgency in the Free World, with the Ukraine crises vividly illustrating the danger of energy dependence on unpredictable and unfriendly governments – in this case, Russia.

Many think more gas from the U.S. and a global spread of the fracking gospel is the answer. Michael Lindenberger of the Dallas Morning News, recently reporting on the significance of a deal for Russia to strengthen it’s economic status with a $400 billion deal to export gas to China, cited Texas Senator John Cornyn as characterizing the broad political push for policy to encourage more U.S. exports. More exports, according to Cornyn, make economic sense but, moreover, are justified “because of the competition it would provide for Putin and the Russian monopoly.”

Of course, we are talking about shale gas and fracking, so it comes as no surprise that there is little consensus and much division on the topic. Seamus McGraw, author of End of County, Dispatches from the Frack Zone, has been following the fracking issue since he began writing his book as the shale gas boom first developed in Pennsylvania. He points out that the global economics of shale gas cannot be isolated from the economics of other energy sources, including coal. The political urgency provoked by international threats in areas involving key American interests must account for the practicalities of various solutions. And a primary practicality of shale gas exports involves infrastructure in place to get energy where it needs to go today, not years from now. And here I will give McGraw the last word. In a recent discussion on my Facebook page, he posted:

You're not going to break Russia's stranglehold (on natural gas exports) because a) they've got pipelines which beat LNG (liquid natural gas) every time, and b) because they can set the price as low as they want to drive us out of market and then jack it back up at will. All this is going to do is drive up prices here to the point that gas may no longer be reliably competitive with coal, choke off any ancillary economic benefits to manufacturing, and concentrate what advantages there are entirely in the industry itself. And even that, as the Russia/China deal demonstrates, isn't going to be nearly as lucrative as the industry imagines. It's a bad deal all around.

Ultimately, global markets along with political considerations will shape the deal, good or bad, and determine whether the value of gas in places like New York ever justifies the costs of extracting it.

Saturday, April 26, 2014

A delivery arrives in the village of Endicott, NY last summerPhoto: NY Friends of Clean Air and Water

ENDICOTT, NY -- An issue over what – exactly -- is arriving in tanker trucks for disposal at a manufacturing plant in Endicott, New York is a recent and vivid example of the fear and uncertainty over the endpoint of waste produced by the shale gas industry, and the lack of regulatory wherewithal to track it.

It’s a matter of record with the New York State Department of Environmental Conservation that the tanker trucks in question are importing more than 80,000 gallons of waste a day to the plant in the heart of the village. That sum includes 30,000 gallons of leachate from the Seneca Meadow’s landfill, and 50,000 gallons from the Broome County landfill. But there is much that is not on the record, and I will get to that in a moment. First, some background.

Leachate is the soluable and suspended matter that percolates through landfills with (in this area) 30 inches of rain each year, plus whatever moisture is in the landfill itself. This drainage includes essentially anything that goes into the landfill that can be flushed out with water. Put another way, Leachate consists of landfill dregs.

Municipal sewage treatment plants are generally not equipped to handle landfill leachate, so it’s shipped to commercial plants designed to treat industrial waste. The sprawling manufacturing campus in Endicott, in the middle of a heavily populated retail and residential area of the village, was once home to IBM Corp’s micro electronic division .The industrial park, now owned by Huron Real Estate, includes a plant that has been treating waste produced from onsite operations for decades.

The most recent imports are a new source of income for the current operators, i3 Electronics. They began arriving conspicuously last year from Seneca Meadows landfill in 18-wheel tanker trucks rolling through the village. At that time, the business was owned by EIT, which eventually fell to bankruptcy. Along with the tanker trucks came suspicion and fear that former and current operators of the business are trying to offset steady manufacturing losses and job declines over the years with revenue from waste imports.

The suspicion is not without justification. As far as state regulators are concerned, the plant is processing this new source of landfill waste, without a permit, as part of a pilot study. But no time frame has been allocated, and no public comment period or public notification has been declared. According to Mary Jane Peachey, a regulator with the state Department of Environmental Conservation, the DEC has not monitored the input or output of the plant in at least five years.

And here is another critical piece of background: The i3 Electronics site and the surrounding residential and retail district is a Class 2 state Super Fund site, meaning existing pollution there poses a “significant threat to public health or the environment.” Since 1979, IBM Corp. has been pumping toxic solvents from the ground that have seeped from the micro-electronics plant into the community, affecting more than 470 homes. There have been multiple spills since.

It is no surprise that Endicott residents are generally concerned about becoming a waste destination, and specifically concerned about waste from shale gas development, which have been banned in New York pending a health review.

Much of the controversy over fracking waste involves the chemical solution that goes into shale gas wells to stimulate production, and the liquid mix of brine, chemicals and metals that comes out. But liquid waste – called flowback – is just one part of a broader metric. Shale gas development also involves a viscous solution called drilling mud, and solid waste, including drill cuttings tinged with varying degrees of metals, solvents, and naturally occurring radio active material (NORM) from deep in the ground. It’s a matter for record that drilling cuttings from the Marcellus Shale tend to be radioactive, and the New York State Department of Health has advised officials from the DEC to devise a testing protocol to ensure hot drilling waste is handled and disposed of properly .

Drill cuttings, like flowback, are also exempt from federal hazardous waste handling laws, and they often end up in landfills, like Seneca Meadows.

And that’s how shale gas dregs can end up Endicott, or countless other places where landfill leachate is treated. The shipping of leachate to private plants is not, in itself, sinister, or even especially newsworthy. It’s the exemptions, loopholes, and lack of disclosure about its contents that makes it a problem and rightly invites the attention of activists and media watchdogs.

According to records filed with the state Department of Environmental Protection, the Seneca Lake Meadows landfill was the final destination for Marcellus Shale drill cuttings from 196 wells drilled in Pennsylvania during 2010 and 2011. After tracking this bit of information down on their own, some Endicott residents and area activists wanted to know if this potentially radio active drilling waste stream ended in Endicott via the importation of Seneca Meadows leachaete. If so, were state regulators aware of it?

And that brings us to the part of the story where the record gets muddy.

A citizens group called the Western Broome Environmental Stakeholders Coalition met with the DEC’s Peachey in February to get to the heart of the matter. (A video of the meeting, filmed by activist Bill Huston, is available here.) Early in the meeting, the question came up as to whether the Seneca Meadows leachate arriving in Endicott was tested for radioactivity – a simple question that apparently invited a very confusing answer.

Peachey said that step is unnecessary, unless agency personal “are aware” that the waste comes from a suspected radioactive source. “When we are aware that someone is taking a waste stream that would have those elements we would require them to do appropriate sampling and monitoring for that,” she explained.

When a resident pointed out that Seneca Meadows takes Marcellus drill cuttings, Peachey challenged the source of that information. “If they were taking fracking waste now I think we would know it,” she said. When told that the information came directly from the Pennsylvania DEP database, Peachy replied: “I would question that ... I would like to substantiate that more with what’s currently going on there.”

DEP records show that Peachey is technically correct. Seneca Meadows is not currently taking waste from shale gas wells. But she failed to tell the group – in a meeting that was purportedly intended to inform the public and set the record straight – that the Pennsylvania record also shows the landfill did accept cuttings from nearly 200 wells over a two-year period. In bureaucratic form, Peachey fixated on timing and semantics while ignoring the essence of the matter.

While Peachey’s response could be explained as an attempt to disarm a source of PR headaches for the agency, it did nothing to address the issue at hand: drill cuttings in the Seneca Meadows landfill and their influence on the leachate. And it circumvented the original question – is the leachate from that landfill being checked for radioactivity as it rolls into Endicott?

The answer (as eventually revealed – sort of) is no, and perhaps there is a good reason that it is not. (Addressing a later question from the audience, Peachey explained that it is up to landfill operators to check for radio-activity.) But Peachey’s failure to acknowledge, much less explain, the record of shipments of cuttings from Pennsylvania gas wells to Seneca Meadows does not inspire trust. The error of omission could be a misguided attempt for damage control. Or it might be evidence that the department is out of the loop in what she pointed out was a “transaction between one private company to another private company.”

Another possibility, no more reassuring, is that the Pennsylvania records are untrustworthy. Before gaining access to the DEP website, visitors must agree to this disclaimer that notes that the data is self-reported, unchecked, unverified, and possibly incomplete:

DEP makes no claims, promises or guarantees regarding the accuracy, completeness or timeliness of the operators’ data that DEP is required to post. DEP expressly disclaims any liability for errors or omissions related to the production data contained within these reports. No warranty of any kind is given by DEP with respect to the production data contained within these reports posted on its website.

All of this uncertainty points to an overarching problem: the industry’s exemption from federal laws that mandate a clear tracking and specific kind of handling of hazardous waste. States are left with that job, and more often than not, state officials – citing a lack of resources -- defer to the industry to get the job done.

The issue of where the waste goes, which I have written about in several posts, is especially pressing these days, as tens of thousands of shale gas wells come on line in Pennsylvania and Ohio, and tens of thousands more elsewhere in the country.In the absence of federal hazardous waste laws and lack of regional planning, placing the waste becomes a process of default as various states consider legislation to ban it. (New Jersey legislators are crafting a second attempt at a ban after the first was vetoed by Gov. Chris Christie, and the issue is also being considered in New York and Connecticut.) Hence, rather than guided by a master plan, the waste is following the path of least social and political resistance. Much of what comes from the Marcellus, as far as we can tell from industry’s self policing records, goes to injection wells in Ohio, and various landfills and private treatment plants in Pennsylvania and New York.

In addition to Seneca Meadows, DEP records show that New York destinations for waste from the Marcellus Shale include Hyland in Angelica, the Hakes Landfill in Painted Post, the Chemung Landfill near Elmira, Seneca Meadows Landfill in Waterloo and the Allied/BFI Waste Systems landfill in Niagara Falls.

Communities like Niagara Falls (and notably Love Canal) tied to a history of toxic waste disposal are especially sensitive to the possibility of a future tied to more of the same. Even though the Buffalo area does not sit over a viable shale reserve, I have found during book signings there that community members are keenly attuned to the issues of shale gas development and, specifically, the lack of assurances about its waste stream.

Endicott is also one of those places. People in the village are angry that they were not notified about waste imports to the i3 Electronics plant. Matters were made worse last year when a corroded tank holding the contents of a Seneca Meadows shipment failed and at least 6,000 gallons of leachate spilled out, much if it soaking into the ground. Residents were not informed of the shipments or the spill. They were left piecing together information until a year later, when John Okesson, Peachey’s colleague at the DEC, explained details at the February meeting after sustained community pressure for the agency to account for it.

Rick White, a community member and labor advocate, summed up feelings at the end of the meeting. He referred to decades of spills, a pattern of secrecy, and a resulting legacy of environmental problems that, in his words, “stack up.” He continued:

This whole community is very sensitive to the idea that if there is additional toxic fluid, whether it is fracking waste or landfill waste or whatever it might be, and it’s coming into the village of Endicott for whatever the reason, whether it’s to make money or to enrich somebody’s pockets or it its simply to do a good service to the community, the negatives outweigh the positives. And this is why we are asking these questions.

His comments were met with applause from the 50 or so people in attendance.

Saturday, March 29, 2014

Update, April 30 2104: Scroggins V. Cabot trial, set for May 1 in Montrose, Pa., postpomed until July 2.

***

A ruling Friday by a Pennsylvania judge to allow activist Vera Scroggins back on land leased by Cabot Oil & Gas is a “big win” according to her legal team, but the fight will continue in a trial scheduled for May 1.

An order, drafted by Cabot attorneys and handed down by Judge Kenneth Seamans in October, barred Scroggins from setting foot on land owned or leased by Cabot, “including but not limited to” well sites, well pads, and access roads. That language kept Scroggins from approximately 200,000 acres -- nearly 40 percent -- of Susquehanna County where Scroggins lives, including property of friends, neighbors, stores, parks, schools and health care providers.

After a hearing Monday, Judge Seamans modified the injunction to restrict Scroggins only from work areas designated by no-trespassing signs and a 100-foot buffer zone. The new order, issued on Friday, allows Vera to enter other land leased by Cabot, including markets, public spaces, physicians offices, and hospitals. It also allows her to use public roads that go by work sites, but the ruling stipulates that she cannot stop or linger at the entrances to access roads.

In an interview Friday with Associated Press reporter Michael Rubinkam, Scroggins’ attorney Scott Michelman characterized the revised order as “a big win,” but he added that the 100-foot buffer could pose unjustified restrictions. Scroggins said the revised order was “a step in the right direction. ” She told me today that she and her legal team will fight the buffer zone at a trial scheduled for May 1.

Scroggins’ vantage point was mostly from public roads by drilling sites, although Cabot claims that she also trespassed onto private land under lease by the Texas drilling company, posing a safety risk to herself and others. In a statement Friday, Cabot officials said they were "satisfied” with the ruling to maintain an injunction against Scroggins that “protects Cabot and its employees, contractors and others” and “keeps landowners from being exposed to liability that could arise from Scroggins' actions."

One of the main questions to be resolved: Is a buffer zone, which does not apply to other citizens, necessary to protect the health and safety of Scroggins and others, as Cabot claims, or is it being used by Cabot to discourage anti-fracking activists from filming or viewing Cabot operations from legitimate vantage points, as Scroggins claims.

Scroggins has taped and posted hundreds of video files on You Tube showing drilling operations in Susquehanna County since 2009, including spills, clean-ups, and discharges. The videos cast operations in a way that runs counter to the industry’s portrayal as clean and safe. Scroggins has also lead tours for political action groups, academics, journalists, and other interested parties visiting the area to learn more about drilling and the controversial practice of high volume hydraulic fracturing to stimulate the gas wells.

Monday, March 24, 2014

Vera Scroggins and her lawyers (left) at the Montrose courthouse Monday

A confrontation over free speech and land rights that began inside a courthouse in Montrose, Pennsylvania this morning grew more contentious outside, as lawyers and demonstrators took their arguments to the courthouse steps and parking lot.

The hearing, in the Court of Common Pleas before Judge Kenneth Seamans, involved what degree Cabot Oil & Gas can limit activist Vera Scroggins in her attempts to videotape drilling operations and related activity. The company has faced public relations and environmental problems in Dimock township after the state Department of Environmental Protection held Cabot's operations responsible for polluting an aquifer that supplies dozens of homes in Dimock Township.

Scroggins has taped and posted hundreds of video files on You Tube showing drilling operations in Susquehanna County since 2009, including spills, clean-ups, and discharges. The videos cast operations in a way that runs counter to the industry’s portrayal as clean and safe. Scroggins has also lead tours for political action groups, academics, journalists, and other interested parties visiting the area to learn more about drilling and the controversial practice of high volume hydraulic fracturing to stimulate the gas wells.

Scroggins’ vantage point was mostly from public roads by drilling sites, although Cabot claims that she also trespassed onto private land under lease by the Texas drilling company, posing a safety risk to herself and others.

One basic question before the court was whether Scroggins willfully and habitually trespassed. Her lawyers said that drilling zones were not always clearly marked with no trespassing signs, that Scroggins' ventures into drilling territory in each case were in good faith to openly ask questions and seek information, and that she always complied if asked to leave.

Two other questions, however, make the case a potential landmark test of a company’s control over property it leases but does not own. The first question is whether Cabot can legally keep Vera away from leased land, including access roads, with a buffer zone that extends into adjoining public roads and right-of-ways. The second question is whether a party that owns sub-surface rights but not surface rights can legally act as “gatekeepers” for who can and cannot come onto the land. Can a mineral rights lessee forbid a person who has been invited onto the land by the property owner to view operations?

Seamans granted the injunction in October, after Vera appeared in court without an attorney to answer the trespass charge. Since then, the case has generated interest and outrage among activists who say Cabot is restricting limits on Scroggins’s constitutional right to report what is happening in her community, and its actions have a chilling effect on others. Attorneys Scott Michelman, of the Public Citizen Litigation Group in Washington, D.C. and Gerald Kinchey, in private practice in Sayre, Pa., have taken up Scroggins’ case pro bono.

Ostensibly, the injunction was designed to keep Scroggins away from work areas for safety reasons. But technically, the language forbids Scroggins from setting foot on land owned or leased by Cabot, “including but not limited to” well sites, well pads, and access roads. That phrasing is what makes the case a possible watershed. The Texas drilling company has leases on more than 200,000 acres -- nearly 40 percent -- of Susquehanna County where Scroggins lives, including rights to property of friends, neighbors, stores, parks, schools and health care providers. Obeying the injunction has required both active research to find out what land is leased, and also avoidance of places that she would normally go without thought.

At today’s hearing, Cabot proposed an alternative plan that would ban Scroggins from 150-foot setbacks from access roads and 500-foot buffer zones from work sites. Cabot attorney Amy Barrette, of Norton Rose Fulbright, argued the setbacks were necessary because “given Ms. Scroggins’ past conduct, if you give her an inch, she will take many, many miles, and she will be up on the well pads.”

Michelman argued that the order went well beyond addressing safety concerns and posed “a chilling effect” on the speech and actions of activists who wanted to call attention to fracking operations. An injunction that prevented Vera from entering designated work sites would be reasonable, he said, but not a buffer zone. He pointed out that such a zone could keep Scroggins from certain parts of public roads as well as areas that property owners are allowed on, even if they invited her to go with them.

The broad scope of the injunction is not about safety, but a ploy to intimidate activists, Michelman said in an interview after the hearing. “It tells them you will pay for exposing what is going on at these sites. You will pay for speaking out against the big oil and gas companies.”

During the hearing, Kinchy argued that, unless it is specifically written in a lease, the lessor of sub-surface rights does not have the right to dictate who can and cannot come onto leased property. That principal will be relevant if the case goes to trial. Jeremy Mercer, a lawyer for Cabott, rebutted that Pennsylvania case law does in fact give mineral rights holders such rights.

Seamans adjourned the hearing after attorneys from each side agreed to send the court versions of the order that they could live with. Judging by the arguments, that would be in Scroggins’ case an injunction that keeps her from well pads, work areas, and access roads, and in Cabot’s case an injunction that keeps Scroggins from both these areas and specified setbacks from these areas. The case is scheduled to be tried May 1 unless the parties can come to terms.

A small group demonstrated support for Cabot

More than 120 people attended the hearing, many of them activists from outside the area who were there to support Scroggins. A contingent of a half dozen or so drilling proponents, including some local landowners, demonstrated support for Cabot’s position.

After the adjournment, the crowd swarmed outside the courthouse where both pro-drilling and anti-fracking groups held press conferences. In a rally on the courthouse steps, drilling supporters held signs that said “Drill Baby Drill” and “Vera Get Off Our Land.” At the same time, a mix of Scroggins supporters and adversaries gathered in the corridor that lead to the back parking lot. Vera had sat quietly during the hearing and let council do the talking. Now, flanked by her lawyers, she used the platform to criticize the industry’s safety record and to call for more scrutiny.

“It sends a message that if you speak out, you will pay. This is an outrage,” she said, citing violations that the state has issued the company. “Why are they allowed to operate?”

Barrette (right) argues with Michelman over intention of Scroggins injuncttion

After about 10 minutes, a sheriff’s deputy told the crowd to go outside because the congestion in the hallway was posing a hazard. About this time, Barrette, Cabot’s attorney, shouldered her way through the crowd to Michelman, who was standing next to Scroggins. After an exchange, they exited to the parking lot. Some of the conversation was lost in the noise, but it had to do with the merits of the injunction and the way it was written.

“Did you draft that order?” Michelman said as the two faced each other in the parking lot.

“Yes, and the order was not sought to keep her from the hospital or any of those other places,” Barrette replied.

“Its language was categorical,” Michelman said. “If you wanted something different, you should have drafted it more carefully, and if you didn't like what the court entered you should have moved to modify it. You could have done that in the last five months.”

“We gave you a very narrow proposal that you rejected many times,” Barrette said, as a cluster of reporters and spectators caught up with them. “We'll let the court decide.” Barrette referred questions from reporters to George Stark (a company spokesman who has not returned my calls) and she walked away to rejoin the pro-drilling group in the front of the courthouse.

Shale Shock Media captured some of the events following adjournment, including the confrontation in the parking lot, in the video below:

Thursday, March 6, 2014

Is the Pennsylvania Department of Environmental Protection a lion or a lamb when it comes to regulating and policing shale gas operations?

One qualified and independent source will soon provide an answer. Im May, the office of Auditor General Eugene DePasquale is due to release a detailed investigation into the practice and protocol of the state's regulation of the drilling industry, a source from his office told me this week.

DePasquale announced the review in January, 2013, in the wake of a controversy over whether state investigators obscure or alter the outcome of investigations into drilling’s impact on water supplies by disclosing an incomplete suite of chemical tests. The intention of the probe, according to a letter from DePasquale, is to determine the "adequacy and effectiveness of DEP's monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination."

In other words, the probe will get to a question at the crux of the fracking debate: whether and to what degree the DEP is safeguarding water supplies from drilling.

The DEP’s testing protocol for wells potentially affected by drilling operations entered the public spotlight with a case by Loren Kiskadden seeking damages for pollution against the agency and Range Resources. The case, now pending in the Court of Common Pleas, claims that the department withheld full results of tests of Kiskadden’s water in June 2011 and January 2012. The ensuing “suite code” controversy came to light in September 2012 with the deposition of Taru Upadhyay, the DEP Bureau of Laboratories technical director, at a Environmental Board Hearing. Upadhyay testified that results for some metals, including copper, nickel, zinc and titanium, were not included in Kiskadden’s final report. This was not unusual, she said, because the lab only verifies concentrations of compounds ordered by the investigator from the oil and gas division, even if the samples were tested for a broader range.

DEP officials have since confirmed that the testing protocol for markers of contamination from Marcellus Shale production – including what and how many chemicals are included in the final analysis -- falls to the discretion of individual investigators because they are best able to judge what chemicals are relevant to the investigation.

Watchdog agencies have characterized the DEP’s approach as random, incomplete, and a violation of public trust. Steve Hvozdovich, Marcellus Shale Policy Associate for Clean Water Action, said residents and watchdog agencies took it on faith that the department was following accepted protocol outlined by the federal Environmental Protection Agency in Method 200.7 – which requires testing for at least 24 different chemicals.

“This comes down to a lack of trust and a lack of transparency,” he said. “Nobody outside of the DEP offices knew this – that they were not quality controlling and quality assuring for the full 24 chemicals. It took a law-suit to bring that out … We need to have comprehensive testing, especially in a case where it originates from a residential complaint.”

Clean Water Action was one of a dozen agencies that signed a letter to the DEP on January 25, 2013 with concerns that the agency's testing methods “lack transparency; result in the withholding of vital data from affected households and the public; force residents to potentially undergo prolonged exposure to contaminants that impact health; and delay action necessary to correct pollution of drinking water supplies.”

But concerns of environmental activists are not shared by all. The DEP’s approach to regulation and enforcement under drilling supporter Governor Tom Corbett has a lot to do with the boss’s political values of how much government should be overseeing private business. The oil and gas industry – provider of cheap abundant energy that we all demand – has been the long-time beneficiary of regulatory passes. For starters, the entire problem of determining what, how, and if chemicals affect water is prodigiously complicated by the fact that the industry is exempt from federal laws that require disclosure and regulations of chemicals injected into the ground, and also laws governing hazardous waste coming out. Corbett, who won election in 2010 partially on a platform to limit state regulations on the industry, has been praised by industry supporters who defend the DEP oversight as sufficient and responsible.

No matter what it says, DePasquale’s report, coming in May, will likely be controversial due to the political volatility of the subject matter. In addition to the water-testing issue, the probe will “determine the adequacy and effectiveness of DEP’s monitoring of the handling, treatment and disposal of waste connected with shale gas development activity, including but not limited to systems and procedures for testing, tracking, treating, disposal, data collection and analysis, reuse and recycling, reporting, and response to adverse impact such as contamination.”

It’s sure to add a new wrinkle to the shale gas debate as the election year heats up, beginning with primaries among gubernatorial candidates who will likely have something to say about it. Those include John Hanger, a Democrat, who served as DEP Secretary under the Ed Rendell administration. Hanger is a gas supporter, but he is also in the pro-regulatory camp. As DEP chief he has been critical of – and sometimes at odds with -- certain companies he characterized as rogues. He has called on the DEP to reform its protocol to ensure a comprehensive data set of water test results gets to people who are potentially affected by drilling. The degree Hanger's message resonates with primary voters will be one of many tests of how much weight regulatory reform carries in the larger political equation.

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Praise FOR UNDER THE SURFACE

Under the Surface represents a kind of reportorial fracking, in which the indefatigable Wilber bores in to extract how the process has had an impact on the lives of those atop or near that gas. -- David Margolick, contributing editor, Vanity Fair, and author of Elizabeth and Hazel: Two Women of Little Rock

I find Wilber (and his book) to be the closest thing to ground truth that exists in the hype-cloaked arena. -- Andrew Revkin, New York Times Dot Earth

With a journalist's command of the facts and a novelist's eye for his subjects, Tom Wilber takes us to the living rooms, farms, meeting halls, and mountain streams where the fracking drama plays out daily. -- John Cronin, senior fellow at Pace and Clarkson Universities and coauthor of The Riverkeeper

Wilber, a former environmental reporter who has been covering the fracking debate from the beginning, combines a storyteller’s ear with a journalist’s eye, offering a sensitive and especially timely take on the issue… This book will be essential background reading for the still-unfolding fracking drama. --Publisher's Weekly

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